Analysts at Rabobank suggest that even though Trump’s Sword of Damocles is hanging over the markets today, the other big thing that will be watched closely is the 14:30 CET release of the Employment Report.
Key Quotes
“The printed market consensus for the August non-farm payrolls number is 195k, up from 157k in July and broadly in line with the 12-month average. It also corresponds fairly well with the latest set of other monthly labour market indicators, which, when entered into our econometric model, points to 192k jobs.”
“The better number is drawn from firm indications stemming from the 4.2% GDP pace registered in the second quarter, the buoyant confidence measures and yesterday’s fresh record-low in initial jobless claims.”
“The broader uptrend in economic growth, which is to a large extent driven by strong consumption, should continue to be supportive for the labour market. That being said, yesterday’s ADP estimate, which usually is much less volatile than the official number, fell to 163k from 217k.”
“The manufacturing payrolls number will be scoured for clues on whether the trade tensions have already had any negative impact on US industries. But as we explored in this special, jobs were the main motivation for the rise in protectionism in the 1930s and today.”
“Finally, the average hourly earnings measure is expected to hold at 2.7% y/y following a 0.2% m/m rise, which is consistent with the average pace of growth recorded over the past months.”
“Yet, in light of the Fed-driven EM turbulence and the wider fallout in global markets, a set of numbers that indicate the US labour market has some more room to run (i.e. strong job numbers, limited wage growth) would be more supportive for market sentiment.”
Share
